Forsyth County reports successful bond sale; staff outline plan to re-house school capital funds and set aside interest for debt service and arbitrage
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Summary
Forsyth County sold $33.635 million in general‑obligation bonds on June 10 and staff outlined how premium and interest earnings from bond proceeds will be consolidated into a new education capital project ordinance.
Forsyth County finance staff reported the results of a recent general obligation bond sale and outlined a plan to consolidate and reallocate school‑related capital project funds.
Deputy CFO Lee Plunkett told commissioners that on June 10 the county competitively sold $33,635,000 in general obligation (two‑thirds) bonds. The winning bid came from UBS Financial Services with a true interest cost of 3.884 percent. Bond sale premium totaled about $1,766,000 — slightly above prior estimates — and Plunkett said that amount was earmarked by the county’s adopted accounting approach: roughly $530,000 for schools, $1,100,000 for county projects and just under $100,000 for SciTech.
Plunkett and other finance staff explained follow‑up actions to align capital accounting under newly adopted capital project ordinances (CPOs). The board previously adopted new county and education CPO frameworks that group projects by purpose rather than by funding source; the June 16 briefing covered closing eight outstanding school and SciTech CPOs and moving residual balances into the new education CPO. Staff said balances will be allocated into three buckets: ongoing project budgets moved unchanged into the new CPO; budget reserves (including roughly $3.2 million remaining from the 2016 referendum and about $17 million unofficially designated from 2023 bonds); and debt‑service/arbitrage reserves to meet Internal Revenue Service limitations on allowable uses of bond proceeds and interest earnings.
Plunkett said the IRS permits proceeds and interest to be used for capital projects, debt service, or arbitrage rebate liabilities; staff have set aside funds to cover an estimated arbitrage liability and to create a debt‑service reserve. Preliminary internal estimates indicate the county could apply roughly $4.7 million in available education‑CPO interest earnings to FY26 school debt service and about $1.0 million to community college debt service, though Plunkett said he was meeting bond counsel to confirm detailed tax‑law nuances.
Commissioners asked about whether the set‑asides could free general‑fund dollars budgeted for debt service and whether the school system’s Ashley Elementary project timing would be affected by any reallocation. Staff said conversations with the interim superintendent are underway; any reallocation would return to the board for formal approval.
No final reallocations were made in the briefing; staff sought direction to proceed with closing old CPOs and placing residuals into the new education CPO so the board can later consider options for debt‑service relief or reprogramming.
